What do you do when your buyer has unreasonable repair requests?
You have prepared your house for the market as best as you can. You priced it accordingly and now have your property under agreement.
Now you are nervously awaiting the home inspection results from the buyer.
Finally, you hear from your buyer.
But you find the buyer has a long list of repairs after their home inspection.
You are wondering what to do when your buyer requests home inspection repairs.
Are the home inspection repair requests unreasonable?
Are any repairs mandatory after the home inspection?
Should you do all the repairs?
Should you tell the buyer no?
As a seller, you find that maybe a couple of the inspection requests are reasonable and some of the home inspection requests are unreasonable.
How do you handle reasonable repair requests and how do you handle unreasonable repair requests? Find out in this article how to handle repair requests with your home buyer.
What Repairs Are Mandatory After A Home Inspection?
There are no mandatory fixes after a home inspection.
You and the homebuyer have already agreed to a purchase price and while the contract has a home inspection contingency in their contract, it does not mean that a home seller has to perform any requested repairs after the inspection.
A home inspector may call items out of code with the local building department. That still does not mean you are required to fix it.
A new home can “be out of code” shortly after being built. Building codes change regularly. But, you are not obligated to bring your home entirely up to code because the buyers are demanding its a mandatory repair after the inspection by law. FALSE!!
Most inspection contingencies give the right for a buyer to terminate a contract with no further recourse if they find defects in a home that are unsatisfactory. But in no way is a seller obligated to make any mandatory fixes after a home inspection.
In reality, many buyers may use this clause to negotiate a new price or to have the seller make fixes. And, in rare cases, a buyer may completely pull out of the deal if there are serious issues in the home that they were not expecting.
How to Negotiate After A Buyer Requests Home Inspection Repairs
Your personal circumstances, the state of the real estate market and the seriousness of the repair will factor into how you negotiate after a buyer requests a price reduction or repairs prior to closing.
Remember, there are no mandatory repairs after a buyer’s home inspection.
But, it may be prudent to consider doing some of the repairs if asked. There is no right or wrong.
There are some things to consider before negotiating home inspection repair requests.
- The seriousness of the requested repair. Mold, water penetration, faulty electrical, major structural issues etc… are all problems you may want to consider taking on.
- What will happen if your home returns to the market due to inspection issues? In a buyer’s market, having to put your home back on the market because of severe or expensive problems can kill a future sale and the repair or repairs will likely cause a price reduction.
- The state of the real estate market and how easy it will be to secure another buyer.
Here are a few suggestions of how your home buyer’s home inspection requests can be handled:
Reject Any Counter Offers of Inspection Repairs
Of course, as a seller, it is well within your right to deny any repair requests especially if the requests from your home buyer are unreasonable.
Don’t be penny-wise and pound-foolish, though. It is probably not prudent to kill a deal over a few hundred dollars worth of repairs unless it is a strong seller’s market.
While you do not want a home buyer to take advantage of a situation, there is always some hesitation from buyers with a house that has come back on the market due to home inspection issues.
Consider What Happens If Your Sale Falls Through Over Home Inspection Issues
A house will become highly suspect if a deal falls through and comes back on the market. The first question from a home buyer is what showed up on the home inspection?
Remember, as a seller, if you are asked about previous home inspections and to describe the issues, you must answer the request truthfully. If there are severe issues that should be taken care of, most likely, these same issues will continue to rear their ugly head with each new buyer during a home inspection.
A real estate agent is under obligation to disclose any known issues with a house even if the seller doesn’t. You can’t ask an agent to hide a severe issue with your home.
As I said, it is well within your right as a home seller to reject home inspection repair requests whether they are reasonable or unreasonable. But ensure you have thought it through carefully and consulted with your listing agent.
Negotiate Home Inspection Repairs
Often, a home buyer will ask for specific repairs to be performed by the home seller by closing. You can certainly negotiate what repairs you are willing or not to do. While doing the repairs can be burdensome on a home seller who is also trying to pack up and move, I find this more cost-effective than negotiating a price reduction.
In my experience, a buyer will way overestimate the repair cost when a home seller can have the repair work done for much less than the buyer is requesting.
A buyer’s head is usually spinning after a home inspection with a long list of punch list items.
They are like Chicken Little running around screaming the sky is falling. When in reality, many of the issues are minor and can be rectified quite simply.
Negotiate A Price Reduction
If trying to pull together home repairs before closing seems daunting, consider paying all or some of the buyers closing costs or a price reduction to compensate for the future repairs a home buyer must do.
The plus of a price reduction is it does eliminate the stress of getting the repairs done yourself. The downside is it can be more challenging to come to termsover the cost of the repairs. A buyer will always overestimate the cost of repairs.
Or, you can handle the after-home inspection negotiations both ways. You can choose to handle some repairs yourself and offer a price reduction or closing cost credit for others. Nothing is set in stone.
A Word On Closing Cost Credit
One concern from buyers is if you negotiate with the buyer to do the repair themselves and you reduce the price of the home, where does the extra money come from. A price reduction does not put money in your home buyer’s pocket, but a closing cost credit does.
Are My Buyer’s Making Unreasonable Repair Requests?
So what repairs should a home seller consider doing?
When your home buyer requests home inspection repairs take the time to review carefully.
Do not immediately become defensive and think they are making unreasonable repair requests.
Maybe they are, maybe they aren’t. But don’t let emotions overtake you without carefully considering what requests your home buyer is making after the home inspection
Make sure you have a clear understanding of what the buyer is asking for after their home inspection. They should provide evidence of the issue by providing the particular section of the home inspection report spelling out the issue.
Are The Home Inspection Repair Requests Reasonable or Unreasonable?
Now, this is where you have to pay attention to what is reasonable for your price range and the type of market you are in, and even where you are located in the country.
Take two similar houses where one is selling for $350k and the other is selling for $500k. The expectation of the condition would be different. You would expect the house for $350k would need far more work than the one selling for $500k This is where your real estate agent really can counsel you based on what they are seeing in the marketplace.
Review with your listing agent what inspection requests are reasonable and you might consider doing (if any) and what buyer repair requests are unreasonable.
Unless otherwise stated by the seller in the seller’s disclosure a buyer expects (and reasonably so) a home to be relatively safe, healthy and functioning correctly at the time of the sale.
Consider The Current State of The Real Estate Market
You need to consider the current market conditions first. The market is very different today in 2021 vs the market in 2010. Today the market is on fire, buyers are fighting fiercely for good homes. But, in 2010 a seller could barely give a house away.
How you handle repair requests can be very different based on market conditions. Today,you can pretty much tell a buyer next, please, if they dare ask for any requests at all. There is most likely another buyer right behind them willing to accept your house as-is.
In 2010, you had to consider every repair request seriously even if the request was unreasonable. If you said no, you could easily turn the buyer away and not know if you would even get another offer.
The Difference Between A Buyer’s Unreasonable Repair Request and A Reasonable Repair Request
Serious issues may arise a seller is not aware of at all during the inspection of a home. A seller can live for years with excessive amounts of mold in their attic or high levels of radon in the home and not even know it.
Both of these do pose a health risk to potential occupants. These are requests that a seller should consider making.
Other Examples Of Reasonable Requests vs. Unreasonable Requests
An electric panel that has had water penetration and corrosion is a fire hazard and should be rectified by an electrician and a home seller should probably consider the repair or a closing cost credit back at closing. A home buyer has put in an offer expecting the panel to function properly and safely.
But, a 100 amp panel that may be at its max, but fully serviceable, is not necessarily a repair request a seller should consider. There are no safety issues and it is fully functional.
A furnace that is functioning properly but is past its useful life is another story. As far as I am concerned you are delivering a home with a functioning furnace and in good repair.
Even if the system is older I don’t see a properly functioning furnace as a repair request that should be considered. The current furnace could die next month or last another 10 years but it is functioning properly at this current time.
Now if the furnace has a cracked heat exchanger that again is a safety issue. It could leak dangerous carbon monoxide into the home.
What it boils down to, is:
Does it present a serious safety or health issue?
An outside outlet that is not GFCI or insulation in the attic that is not to code is not what I would call a serious issue and should be reviewed on a case-by-case basis.
At some point, the buyer needs to realize that they are buying a used house. Not everything will be to current building codes and there are some dings and dents.
What I usually break it down to does the deficient area of the home present a serious safety or health issue or is it a serious and costly system or structural issue.
Do Your Due Diligence
You have a list of items you might consider either compensating a buyer for or are willing to repair. Do your due diligence and call some contractors that are appropriate for the job.
It is much easier to negotiate from a position of knowledge than one of uncertainty.
For example, I recently had a buyer who wanted $2000.00 off for a pest treatment for mice. The buyer was providing a quote they received from a pest company. I jumped on the phone and called a few pest companies I have used in the past. I received a quote under $400 with a 6-month guarantee.
There is a vast difference there. A listing agent selling your home should be willing to help you make those calls.
Remember a home inspector knows a little about a lot of things but is an expert in none.
Often a question of concern from a home inspection can be made to go away by a quick, inexpensive appointment with the appropriate specialist. If a licensed electrician, plumber or other professional puts their stamp of approval on something being in proper working order it is very difficult for a home buyer to dispute that.
Negotiating Home Inspection Repairs
If your home buyer is being unreasonable with their home inspection repair request, present what you are willing to do and not do when it comes to repairs or price adjustments.
Keep emotion out of the negotiations. It is easy to get angry or offended,
Many buyers will come with a long list, hoping to negotiate somewhere in the middle. Start the negotiations even if it is the smallest of concessions.
Give A Little, See What Happens
If the buyer asks for a lot and you are unwilling to do much, give a little and see what happens. I have often closed the gap in situations that seem impossible between a buyer and seller as a listing agent.
As real estate agents, we spend part of every day negotiating and your listing agent can be invaluable. If you and your agent have done your homework about the market costs of repairs and have a good understanding of how your house compares condition-wise to other places in its price range, calmly present your case to the buyer and know when you are just willing to walk away and move on to another buyer.
More often than not a buyer and seller can agree on terms they can both live with.
When The Buyers Ask For Unreasonable Repair Requests After The Inspection
You can’t stop your buyers from asking for unreasonable repairs. I have seen buyers that want every little picky item repaired. It happens.
Remain calm and talk with your agent about what repairs you should or shouldn’t do based on the current real estate market conditions and your home’s competition. Remember, everything is a negotiation.
Some buyers will ask just to see what they can get from you. Others may genuinely expect perfection.
If your buyer is truly unreasonable with their repair requests be prepared to shut down negotiations and walk away.
Prevent Buyers From Requesting Repairs After A Home Inspection
The best defense is a good offense. And, preventing repair requests after a home inspection starts before listing your home.
When you are preparing your home for the market, go through your home with a fine-tooth comb and take care of any nuisance repairs that you find.
Minor plumbing leaks, peeling paint, any electrical issues, etc… all can be taken care of before listing your home and hopefully, they are minor repairs you can do yourself or at least for a minimal cost.
Pre-Listing Inspection
Consider having a pre-listing inspection. A pre-listing home inspection will help pull together punch list items to prepare your home for the market and give you an overview of what a buyer’s home inspector will look for during an inspection. If you have taken care of a lot of the issues, it can become a marketing tool as well.
You can show that all of the little nuisance repairs were fixed. And, if not fixed at least a home buyer is aware of the issues as well and should make their offer fully informed about any issues involving your home
Seller’s Disclosure
Filling out your Seller’s Statement of Property Condition in detail will help prevent issues from a home inspection. The Sellers Statement is a multi-page document where a seller discloses details about the home.
While Massachusetts is a “Buyer Beware” state and does not require a seller to disclose anything unless asked, a home buyer who is fully informed about your home should take any defects into effect upfront, prior to an offer if a home seller takes the time to fill out the disclosure.
It is very hard for a home buyer to ask for a repair after a home inspection if the issue was known to them before putting in an offer.
It is essential to have the disclosure in the buyer’s hand before they submit an offer. And, your listing agents should require the disclosure form to be reviewed and signed along with the offer.
A Story Of Disclosure
A few years back, I had a seller whose home was generally in good repair. They did have three windows that had clouded up because of broken seals. It was fully disclosed before the buyers made the offer.
After the home inspection, one of the requests was to fix the windows. My automatic stance is to return to the buyer and show them they signed the disclosure and made the offer with the full knowledge of the three deficient windows.
More often than not, that works. The problem goes away.
Final Thoughts On Home Inspection Repair Requests
There is no right or wrong way to handle your buyer’s request for home inspection repairs after the fact. What are reasonable or unreasonable repair requests can be very subjective. As the seller, you need to decide what repairs you may consider taking on and which are deal breakers.
Take the time upfront and consider a pre-listing inspection. Consider doing any nuisance repairs. And, a detailed seller’s disclosure can prevent a lot of nuisance requests from surfacing in the first place.
Rely On Your Agent for Guidance
There are pros and cons to handling it each way and one may be better for you than another. Look to your agent to see what is a reasonable request and what is not based on the price bracket your home falls in and the current market conditions.
Everything is negotiable. Just because a buyer asks that doesn’t mean that they will walk away if you do not give them everything they want. Be reasonable and hopefully your buyer will respond in kind.
Do Your Due Diligence
Do your due diligence and don’t become defensive. A few small repairs for a few hundred bucks can be a lot easier than killing the deal and putting your home back on the market after wasting valuable time under agreement. Remember a bird in the hand is worth two in the bush!!
At the end of the day, consider… is it worth walking away over a few hundred or maybe thousands of dollars and try to capture the interest of another buyer?
Other Home Inspection Resources:
- Joe Manuasa 5 Tips for Sellers Regarding Home Inspections
- Anita Clark Should a Seller Get A Home Inspection Before Listing Their Home
- Paul Sian Top 8 Home Inspection Issues
- Bankrate Who Repairs? Buyer or Seller?
